- FY17 retail growth was strong at 3.7% (nominal 5.5%) and continued to outpace the broader economy, with GDP growing 2.7%.
- Retail growth in FY17 was spread across the country, with the exception of Canterbury, which had no growth in FY17 as the earthquake rebuild has now peaked. Growth in the regions is likely due to the recovery of dairy prices and property price appreciation spreading from Auckland to the rest of the country.
- Record levels of tourism and net migration continued to fuel retail growth, with accommodation, food and beverage services, electronics, hardware and homewares sectors all continuing to report strong growth.
- Online retail continues to grow, up 14.0% in FY17, with international online retailers now taking 44.2% of online spend by New Zealand consumers, up from 32.1% in 2010. New Zealand retailers need to improve their online offering to defend themselves, especially as research shows 80% of US in-store purchasing is now digitally influenced (i.e. researched online). Online retail is no longer about the 7.5% of transactions that occur online, it is about the research consumers conduct online before purchasing in-store. This is particularly critical with the announcement of Amazon’s arrival in Australasia in 2017.
- We saw a number of retail failures in FY17, including Pumpkin Patch, Shanton, Hardy’s Healthy Living, David Lawrence/Marcs, Banks Shoes, Nosh and PK Furniture, with Topshop New Zealand falling into receivership in August 2017. Despite this, the outlook appears positive with forecast continued GDP growth, reflected in improved consumer confidence. Key risks continue to be external shocks such as a property market correction or global geopolitical instability.
To view the full In Retail – New Zealand FY17 in Review please click here.